Chapter 678 LIBOR is in hand

"Congratulations, Your Highness, LOMX Group has obtained the right to set LIBOR prices..."

Hearing the congratulations from Lloyd Blankfein, the president of Goldman Sachs Group, on the phone, Barron said lightly:

"Thank you for your congratulations, Mr. Blankfein, but this is also a heavy responsibility for LOMX Group."

"Haha, but as far as I know, the Federal Reserve is a little dissatisfied with this, Your Highness."

"This is a matter between them and the British government... We are just executors."

Before Barron left London last time, he talked with Finance Minister Darling about the formulation of LIBOR. After all, in his previous life, the LIBOR manipulation scandal eventually allowed the United States to obtain the pricing power of LIBOR.

After that, the relevant regulatory agencies in the UK conducted an investigation into the pricing and supervision of LIBOR.

The final investigation results surprised Darling. He did not expect that the profit-making of some large banks by manipulating LIBOR was more serious than he imagined.

This also made the British government determined to reform the LIBOR release process.

But one thing is that the British side does not want to make this matter bigger, lest the American side take the opportunity to intervene, thus losing the upper hand in the competition for LIBOR.

Therefore, the British side did not make the specific investigation results public, but called the London Banking Association and several related banks to hold a meeting.

The final result is that the London Banking Association was deprived of the pricing and supervision rights of LIBOR - after all, it can be seen from the results of the investigation that even if the London Banking Association did not directly participate in the manipulation of LIBOR, they at least condoned such things.

After all, they found that this kind of profit from the manipulation of LIBOR did not happen recently, and it was very serious as early as a few years ago.

It also proves that the entire process of the London Banking Association's pricing and supervision of LIBOR is almost in name only.

It can be said that in the face of the British government's request, the London Banking Association has no way to refuse even if it is unwilling, especially those banks. If Darling and others did not want to make the whole thing bigger and be taken advantage of by the Federal Reserve, then the largest banks in the UK, including HSBC Holdings, Royal Bank of Scotland and Barclays Bank, would receive sky-high fines from the Financial Services Authority (FSA).

Now they have already handled this in a low-key manner. In addition to not giving these banks too severe punishments - only a symbolic fine of part of the fine, each bank did not exceed 50 million pounds - they even restricted the media's reporting on the matter.

Of course, at this time, it is even more impossible for the British side to hand over the pricing power of LIBOR to the NYSE's parent company Euronext Group as in the original time and space. The institution that finally chose LIBOR pricing was the London Stock Exchange under the LOMX Group.

After this, the London Stock Exchange will re-formulate the LIBOR pricing process, and Reuters will still publish it.

The original LIBOR pricing process is that every trading day, the 16 large banks selected by the London Banking Association each calculate and report the next day's borrowing rate, remove the lowest four quotations and the highest four quotations, and then calculate the average arithmetic value of the remaining eight banks' quotations, which becomes the day's Libor and is announced to the outside world by Reuters Group.

At present, it seems that this system is very easy to be considered as interference, especially when multiple banks join forces to conspire.

After taking over the pricing of LIBOR, in order to make this process more difficult to be "manipulated", the London Stock Exchange will mainly use two methods in the new pricing plan submitted to the British government-

The first is to increase the number of banks collecting quotations. They plan to increase the number of banks that quote for LIBOR from the previous 16 large banks to 25, and also add a reserve list of 5 banks.

The London Stock Exchange will regularly rotate between the reserve list and the 25 quoting banks to make the pricing of LIBOR more reasonable.

In addition, the mechanism of LIBOR pricing is changed. Specifically, the LIBOR price is not set by completely counting the quotations of 25 quoting banks, but by randomly selecting 20 of the quotations of these 25 banks, and then removing the quotations of the 5 highest bids and the 5 lowest bids, and setting the LIBOR price of the day with the average of the quotations of the remaining 10 banks.

It can be said that their plan can exclude the behavior of collusion between multiple banks to manipulate LIBOR to the greatest extent possible - after all, according to this plan, the possibility of such manipulation of LIBOR has been greatly reduced.

And this time, the London Stock Exchange only got the pricing power of LIBOR. As for the regulatory power over LIBOR originally owned by the London Banking Association, it was taken back by the British government, and the British Financial Services Authority (FSA) will directly regulate the pricing of LIBOR in the future.

Of course, the LIBOR pricing power obtained by the London Stock Exchange this time still has a positive effect on Barron, at least his voice and influence in finance have also been correspondingly improved.

…

"Long time no see, Cather."

"Yes, Barron, maybe I should say it's an honor?"

After reuniting with William, Cather still stayed at Harrods to work. After all, she has become one of the purchasing managers of Harrods. This position is also quite stylish for Cather.

After Barron came to Harrods today, he specially met with Cather, the girlfriend of Prince William. In the eyes of his colleagues, it was also very normal - after all, it is well known that His Royal Highness the Duke of Devonshire and Prince William are close friends.

Of course, this does not include Cather. After all, she knows that Barron, the Duke of England, is completely different from the gentle and elegant appearance in front of her.

"You don't sound like you are talking to a friend, my Miss Cather."

Barron walked to Cather's side and said with a smile.

"Friend? Do you consider me as your friend, or William as your friend? Is having sex with me the way to be friends?"

Seeing Cather's chest heaving and her emotional appearance, Barron shook his head:

"But you were not like this at that time, dear Cather, you kept shouting, "Go faster, don't..."

"Shut up! Barron."

Barron shrugged, pulled Cather into his arms, and whispered in her ear:

"Also, how do you know if William really minds the fact that you and I have sex? Maybe you can try to tell him and see how he reacts..."

"You..."

Seeing Cather's angry look, Barron laughed:

"What I'm curious about is, Cather, I remember you said I was much better than him, so when you were with him, did you feel anything? Or did you always imagine that you were with me at that time..."